Can Turbo Tax Handle An Installment Sale Or Special Depreciation?
I bought Turbo Tax Premier because it was said to be the best for RE investors. But I cannot figure out how to get it to handle a simple flip; in my case, properties bought and then resold on Contract for Deed. Is there some trick you need to ‘trigger’ the activation of the Form 6252 in Turbo Tax, or will I have to fill it out by hand and somehow append/amend it to my return? And can I trigger the Special Depreciation Allowance so I can get the special 50% deduction? It never came up as I was working my way through the process.
I’m quite disappointed with this software. The search function with TT hasn’t been very helpful either; my searches seem to yield lots of results, but nothing specific to getting the program to do what I need. I was led to believe that TT was the real deal for REI, but it seems to fall a little short. Or am I doing something wrong?
[ Edited by loon on Date 03/24/2005 ]
As far as TurboTax is concerned, your sale on Contract for Deed is an installment sale. As far as the IRS is concerned, your flip is likely a dealer disposition.
For dealer dispositions you report the sale of your "inventory" on Schedule C. I am pretty sure that TT Premier can handle a Schedule C activity, but it you are using a S-Corp or partnership, the you need TT Business.
Well, I owe Turbo Tax a bit of an apology; after going through the "Sale of Business or Rental Property" section again more carefully, i found the page where I could process it as an Installment Sale.
Technically, when you flip property, you have not sold business or rental property. You have sold inventory. This is a Schedule C activity.
Is the cost of the "inventory" the total cost of the property or the amount of the down payment on that property?
largo,
The cost of goods sold includes everything spent on the "inventory" while it was in your possession. Acquisition cost, rehab cost, maintenance and upkeep, mortgage interest, property taxes, insurance, utilities, HOA fees, etc. would all be included in the cost of goods sold.
Anybody knows the answer?
Thanks.